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Monday, October 4, 2010

Forex Trader's Weekly Update (October 4 2010 to October 8 2010)

EUR/USD



EUR/USD's up trend continued last week and rose further to as high as 1.3791. Initial bias remains on the upside this week and further rally should be seen towards 100% projection of 1.1875 to 1.3330 from 1.2587 at 1.4024, which is close to 1.4 psychological level. On the downside, below 1.3626 minor support will turn intraday bias neutral and bring retreat first. But in such case, we'd expect strong support from 1.3286 to contain downside and bring another rise.



In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have down to 1.1875 already. Short term outlook will remain bullish as long as 1.3 psychological level holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4600) next. Break there will target a new high above 1.6039.



In the long term picture, considering the long term up trend from 2000 low of 0.8223 to 2008 high of 1.6039, price actions from 1.6039 are viewed as a correction only. Hence, we'd expect another high above 1.6039 eventually, after correction from 1.6039 is confirmed to be finished.



Pips Mover's Weekly Pivot Point for this week: 1.3683

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600



GBP/USD



GBP/USD edged higher to 1.5921 last week but lacked follow through buying. Subsequent volatility mixed up the near term outlook and we'll stay neutral first. On the upside, break of 1.5921 will indicate that rise from 1.5296 is still in progress for 1.5997 high. On the downside, below 1.5668 will flip intraday bias to the downside. Further break of 1.5503 support will confirm that rebound from 1.5296 has completed and turn focus back to this support instead.



In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Above 1.5996 will bring another rise to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.



In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.



Pips Mover's Weekly Pivot Point for this week: 1.5807

Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675





USD/CHF



USD/CHF dropped further to as low as 0.9707 last week before making a temporary low there and turned sideway. Initial bias is neutral this week and some more consolidations could still be seen. But even in case of another rise, upside should be limited below 1.0108 resistance and bring fall resumption. Break of 0.9707 will target 0.9634 low next.



In the bigger picture, as noted before, current development suggests that long term down trend from 2000 high of 1.8305 is resuming. Break of 0.9634 will confirm this bearish case and target 100% projection of 1.2296 to 0.9916 from 1.1729 at 0.9349 next. On the upside, break of 1.0330/0624 resistance zone is needed to signal medium term reversal, otherwise, outlook will remain bearish.



In the longer term picture, USD/CHF continued to trade below a falling 55 months EMA. Even though it kept losing downside momentum as seen in bullish convergence condition in monthly MACD, there is no indication of reversal. Whole down trend from 2000 high of 1.8305 is still in progress for another low below 0.9634.



Pips Mover's Weekly Pivot Point for this week: 0.9773

Historical Levels up to date: 0.9880, 1.0685, 1.0830, 1.0875, 1.1000, 1.1175



USD/JPY



USD/JPY's fall from 85.92 extended further to as low as 83.15 last week but started to lose some downside momentum. While further decline cannot be ruled out, we'd maintain that considering risk of further intervention, strong support should be seen at around 83 level to contain downside. On the upside, above 83.92 minor resistance will flip intraday bias back to the upside for upper side of recent range of 82.86/85.92. However, break of 85.92 resistance is needed to confirm that rebound from 82.86 has resumed. Otherwise, we'll stay neutral first.



In the bigger picture, considering bullish convergence condition in daily MACD, fall from 94.97 might have made a medium term low at 82.86. Though, we'd prefer to see decisive break of 85.89 resistance before confirming. In such case, stronger rally should be seen to 55 weeks EMA (now at 89.77) and above. On the downside, break of 82.86 support is needed to confirm down trend resumption to 79.75 low. But even in case, we'll be cautiously looking for more sign of loss of momentum in case of further decline.



In the long term picture, there is no indication of trend reversal yet and USD/JPY 's long term down trend could still extend further to 1995 low of 79.75. However, we'd be cautious on any sign of loss of momentum and reversal on next fall. Break of 94.97 resistance will now be an important signal of trend reversal.



Pips Mover's Weekly Pivot Point for this week: 83.55

Historical Levels up to date: 93.50, 95.75, 98.00, 99.70, 101.35, 101.70, 103.00, 104.95, 105.50, 106.30, 107.20, 110.50



EUR/JPY



EUR/JPY's rally continued further to as high as 114.79 last week and met mentioned target of 114.72 resistance. While EUR/JPY has been losing some upside momentum, there is no sign of topping yet. Initial bias remains on the upside this week and sustained trading above 114.72 will target 38.2% retracement of 139.21 to 105.42 at 118.32 next. On the downside, break of 112.96 will suggest that a short term top is formed and bring consolidations first. But downside should be contained above 109.54 resistance turned support and bring another rise.



In the bigger picture, a medium term bottom should be formed at 105.42 already. Rebound from 105.42 is now expected to extend further towards 55 weeks EMA (now at 120.33). Sustained break there will indicate that whole long term fall from 169.96 is finished too and will target 139.21 resistance and above. However, note that failure below the 55 weeks EMA will argue that long term down trend from 169.96 is still in progress for 100 psychological level and below before completion.



In the long term picture, up trend from 88.96 has completed at 169.96 and made a long term top there. Based on the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. But EUR/JPY would be contained above 88.96 key support level. We'll hold on to this view unless fall from 169.96 shows sign of acceleration.



Pips Mover's Weekly Pivot Point for this week: 114.31

Historical Levels up to date: 124.25, 126.50, 130.90, 133.25, 135.65, 138.00, 140.00, 151.95, 156.00, 156.85, 164.00





USD/CAD



USD/CAD's break of 1.0190 support on Friday suggests that fall from 1.0671 has finally resumed. Initial bias is on the downside this week for 1.0106 support next. But still, we'd continue to expect strong support from around parity to contain downside and bring rebound. On the upside, break of 1.0230 minor resistance will turn intraday bias neutral first. But break of 1.0377 is needed to signal reversal. Otherwise, risk remains on the downside.



In the bigger picture, consolidations from 1.0851 is still in progress and rebound from 0.9929 is not ready to resume yet. But in any case, we'd continue to expect strong support from parity to contain downside and finally bring rally resumption. Above 1.0675/0671 resistance zone will target 38.2% retracement of 1.3063 to 0.9929 at 1.1126 at least, with prospect of extending further to 61.8% retracement of 1.1866. However, sustained trading below parity will indicate 0.9929 is not yet the bottom and will turn focus back to this low.



In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.



Pips Mover's Weekly Pivot Point for this week: 1.0234

Historical Levels up to date: 0.9805, 1.0060, 1.0270, 1.0470, 1.1025, 1.1140, 1.1270, 1.0160, 1.1940, 1.2040, 1.2225, 1.2475



AUD/USD



AUD/USD climbed further to as high as 0.9749 last week even though it continued to lose some near term upside momentum. In any case, further rally is still expected as long as 0.9461 support holds and current rise is expected to extend further to 0.9849 high next. Break of 0.9461 support will indicate that a short term top is formed and bring deeper pull back.


In the bigger picture, medium term rise from 0.6008 is still in progress. In any case, outlook will remain bullish as long as 0.8770 support holds and further rise should be seen to 0.9849 high first. Break there will confirm that the long term up trend has also resumed and should then target 61.8% projection of 0.6008 to 0.9404 from 0.8066 at 1.0165 next. On the downside, though, note that break of 0.8770 will indicate that rise from 0.8066 is finished and turn focus back to this key support instead.


In the longer term picture, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above 76.4% retracement of 0.4773 to 0.9849. Rise from 0.6008 is possibly developing into a new up trend which extend the long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.8066 support holds and expect an eventual break of 0.9849 high.


Pips Mover's Weekly Pivot Point for this week: 0.9684

Historical Levels up to date: 0.7695, 0.7870, 0.7930, 0.8000, 0.8200, 0.8350, 0.8670